The rationale behind ground zero is to make observations and understand them and not read between the numbers like what fundamental analysis people will proclaim. However, I will not argue that ground zero is a substitute for fundamental analysis. In fact, it will make a good complement even though I think it will be a waste of time going further.

It is most easily used in consumer products. So, it is easier for you to find out about how good windows 7 is since you probably face your computer more than 2 hours everyday. The youths of today are more tech savvy and it is really easier to find out the intangible value of stuffs through peer reviews and personal use. You will probably have a better value in mind than a finance analyst.

A more in-depth application will be similar to how Jim Rogers looks at things especially after he has travelled around the world on his bike. He witnessed corruption, talked to people and through all these interactions, he formed a picture about the economy and investment strategies. I tend to think ground zero from a price point of view. So I will try to see what are the prices doing and the correlation between different markets. For example:

Gold and Oil are inversely correlated with the Dollar. So one fine day, dollar was down for quite a long period of time but only oil picks up while gold stays down. I don't exactly know the reason, there might be tons, but I kept it in mind. This phenomenon continues until the equity market drops one fine day. Oil keeps falling while dollar keeps strengthening. I will probably think that something is going wrong with oil initially and with dollar. A lot of money goes into these two trades and when the equity market collapses, somehow people have to withdraw their position from oil and dollar. Then more people withdraw and the rest is history. Thinking a bit further, you probably feel that people may be doing some leverages in some of their trades be it in oil or dollar or equities. A chain of reaction ensues.

It is really about thinking from people's point of view and what are people doing and feeling rather than from a more static point of view like financial statements. It is not exactly fundamental analysis. In some ways it sounds similar to what Peter Lynch preaches. Nonetheless, I was inspired by a friend with this type of approach compared to my usual airy fuzzy market feel approach. I think it makes a lot of sense.